Book Report: 'Drinking From The Fire Hose' helps analysts find the data that matters

Marketing

Book Report: ‘Drinking From The Fire Hose’ helps analysts find the data that matters

Give me an “amen” if you have ever suffered through a 60-minute PowerPoint presentation of marketing data “results” with no context or analysis.

Christopher-J-Frank-Drinking-Fire-Hose-Author
Christopher J Frank

Raise your hand if you have ever read — or created! — a report so dense with numbers that the point of the report wasn’t even clear.

Nod your head if you have ever left a meeting more confused by information overload than inspired by information insights.

Recently, Portfolio/Penguin published Drinking from the Fire Hose: Making Smarter Decisions without Drowning in Information by Christopher J Frank and Paul Magnone. Frank and Magnone are veteran business leaders with experience ranging from Fortune 500 companies to dot-com era startups.

Paul-Magnone-Drinking-Fire-Hose-Author-Photo-By-Lori-Pereyra
Paul Magnone

Any Internet marketer who is mining mountains of data for insight will appreciate the seven Essential Questions that Frank and Magnone say everyone needs to ask—you’ll have to buy Drinking from the Fire Hose to learn about those.

But exclusively for Raven’s Book Report series, they shared background about the book and practical advice for real-world data overload situations.

Behind the book

Your book is not about managing data overload—you’re not telling people to “measure less” or “stop doing that report”—it’s about navigating through data overload. Basically, it’s not a don’t-do guide, it’s a do-do guide. Why?

Drinking-from-the-Firehose-book
Publisher’s Weekly recommended this book as a top business read for fall 2011.

Information is essential to making intelligent decisions, but more often than not, it simply overwhelms us. You are not going to stop the flow of information so you need the tools to control it. Data itself is meaningless without a framework for analysis of the information and a business point of view so that it can be acted upon.

But information isn’t the Holy Grail. Insight is. Insights allow us to see clearly into complex situations. People make fact-based decisions and they need the tools to govern the flow and direct the information. Managing data overload does not mean avoiding information. Most of the time it means using the data you already have differently.

Books and articles abound about information overload. Drinking from the Fire Hose is a pragmatic guide borne from our experience on the front lines at Microsoft, American Express, IBM and a few startups.

What do you hope your readers will be able to accomplish?

Just about everyone these days suffers from information overload—the 24/7 explosion from digital, social and mobile is fueling this flywheel. Today’s challenge is not the lack of information but the judgment to use it. The volume is drowning out the substance, and it’s growing exponentially.

Business people need the rapid response tools and skills to enable them to get to the bottom line of any business challenge. By learning the right techniques, any organization will make faster, more productive decisions.

The book shows how to leap frog the whole notion of swimming in data by turning facts and figures into practical business learning. Learn to simply and quickly create value by using seven Essential Questions to amplify your decision-making and separate the signal from the noise. Knowing these seven smart questions to ask will lead to better answers.

Was there a single defining moment or last straw that inspired Drinking from the Fire Hose?

There were two moments. One was based on being part of a failed start-up. The business plan was built on market forecasts, industry reports and robust analysis of competitors. The start-up was faster, better and cheaper. But while we had good measurements, we failed to ask an Essential Question and missed the mark, and the business closed. When you have your own money on the line it is a wake-up call and teaches valuable lessons.

The second experience was a few years later when we were in a meeting and someone said “wake me when the data is over.” While it earned smiles around the table, the point was made—give me the essential information I need to move forward. Drinking From The Fire Hose deals with this reality. Time and again, we see these patterns whenever we talked to our colleagues, who need to make decisions.

Drinking from the Fire Hose data addicts

You refer to yourselves briefly as data addicts in recovery, even describing data as morphine that numbs the senses. Have you had relapses?

We are in data rehab. We work every day to remember data is a supporting character, not the main character. Whenever we feel we are slipping we challenge ourselves with one of the seven questions. We kept them short and simple so they could be quickly recalled. It reorients us.

Practical advice for gathering and evaluating data

You encourage readers to find the data they “need”—and “that means limiting the amount of data you gather.” What if your reader is continually asked to gather data he or she feels is irrelevant or a waste of time? Any tips on dealing with that?

Start by completing a simple statement: “I wish I knew…” If you could dream the impossible dream, what do you wish you knew? What information, insights or intelligence do you want at your fingertips? This statement removes all boundaries and biases. Armed with this information, you can use them as coordinates to direct your data gathering efforts. If you’re asked to endlessly mine the data, perhaps introduce “I wish I knew…” to your management team and open their eyes as well.

You write: “The kind of data we’re looking for tells us what our customer wants. So start meetings by talking about the customer—not about numbers or data. Put the customer’s voice front and center.” How, exactly, can readers learn more about their customer’s voice? What is the North Star?

To find a customer’s North Star you can use a simple 4-question framework called the Customer Impact Assessment (CIA) to keep the customer’s voice within earshot of your decision—making process.

  1. How could this decision negatively impact the customer?
  2. How will the customer perceive this change (in price, packaging, advertising)?
  3. How will you manage the change—for the customer, not the company?
  4. How will we track the impact of these changes on customer behavior?

“Looking for the customer’s North Star sometimes means hanging a star up for them, one they didn’t really know they looked to.” Some would call this vision. Can vision and data coexist for a successful company?

We realize that customers at times may not know what they want. Put another way, it is hard to do research on innovation—that is, on products and services that do not have market traction or perhaps yet exist. So in an ideal world, it’s more than just sensing, or learning, what is the customer’s North Star is, it’s taking their information (e.g. behaviors, perceptions, sales), and then applying it to a new way of thinking. And then maybe redirecting them by only five degrees, and showing them a slightly different constellation that suits them better.

What’s the most practical way that a busy professional can get into the habit of looking for surprises in data?

Do not open or read the presentation deck, force a conversation. Go into a meeting and ask the presenter to keep the slides closed. Ask them to tell you about the results. Ask about outliers or any data that could not be explained. Watch what happens (after the initial shock wears off from removing the crutch known as slides) and monitor how much richer the conversation becomes.

Can a data surprise be irrelevant? Are they always meaningful?

Absolutely. Not all surprising data is relevant. Anyone that truly understands the power of information, research and analysis knows it should never make the decision for you. Effective analysis narrows your choices to a manageable set of facts and figures that you then apply your business acumen, intuition (yes, there is some art to it) and business operations/model to define relevance.

One of your sources said he was “humiliated by data all the time. I should have the best gust, or the best intuition, of anybody in the field, and yet mine is often the worst.” Do you find that emotion—perhaps pride, good and bad—can blind people to data surprises?

Emotions can blind people but also there is the reality of business. Again, we take a pragmatic approach in Drinking From The Fire Hose. Trade-offs need to be made. The key is to be conscious when you making these choices, document the assumptions and caveat your decision. You want to be irritatingly objective and focus on the needs of your customer and your overall business rather than those of one program.

drinking-from-the-firehose-lighthouse

By tracking data that really matters—what you call Lighthouse data, like a beam guiding businesses through rocky waters—you say an effective leader can set a course and stay on it. That’s easy in the short-term (a month, a quarter). How can a leader stay focused on Lighthouse data long-term? How should they cope with distractions?

Lighthouse data highlights the big rocks in the road. By definition, they are the long-term barriers you need to navigate around. They will not change in a month or quarter. Every plan should have a barriers-and-bridges section containing a series of ‘Plan B’s,’ or alternative actions should a significant change in market conditions takes place. The key is to do this up front rather than be in reaction mode. Realize that the focus is on the main goal so the minor course corrections are welcome and to be expected.

What happens when there are multiple, possibly conflicting Lighthouse data sets?

If that occurs, we wonder if you are clear on what customers want or what business you are trying to serve. The first step is always to refer to your customer’s North star (see Chapter 2 of Drinking from the Fire Hose). We’ve seen this happen over and over again, throughout our careers, especially when a project team begins to obsess over a single issue, or when the team becomes ridiculously self-absorbed when making business decisions. And again, this intense focus on one’s own business, products or services makes it easy for those who generate the data to ignore customers’ needs, wants and preferences.

You emphasize focusing on customers who aren’t your biggest advocates. Who are “swing buyers,” and why are they so critical when evaluating data?

There is a great deal of material published that states “neutral” customers do not matter. This is short-sighted. These customers already use your products or services, but they are not committed to you. These are the customers who can quickly swing from being satisfied to being highly dissatisfied—or vice versa. They might buy from you today, and from a competitor tomorrow. Think of them as your “silent majority.” And, as such, they have the power to dramatically change your growth curve. Find these customers and discover what they want, and you’ll gain a new perspective on your business, your marketing efforts, your potential sales and, ultimately, your bottom line.

The simple, often ignored truth is that swing buyers offer the greatest potential return on your marketing and product development investments. Done the right way, creating loyal customers out of this swing audience will improve sales without damaging your highly satisfied customers’ perceptions of your brand.

You outline five steps for finding a swing buyer. Could you talk a little bit about each?

  1. Categorize. Bucket your customers, dividing them according to whether they view your brand, product or service favorably, somewhat favorably or unfavorably. Group them in such a way that you maximize the differences between the groups—that is, categorize them so they are as distinct from one another as they can be.
  2. Segment. Break each bucket (from step 1) into segments of leaners, neutrals and defectors based on a single metric. That metric could be overall customer satisfaction, willingness to repurchase, frequency of purchase or average transaction size. Once you have segmented the larger groups, you will know which subgroups are leaning toward becoming buyers, and which are more likely to become defectors. You can then play “offense” or “defense” with each segment.
  3. Profile. Create mini-portraits of your swing voters using their demographics, sales history, etc. With these things in mind, you can then tailor your marketing messages accordingly, depending on your marketing budget and your short- or long-term goals.
  4. Target. Targeting has to do with being able to communicate the appropriate message to your customers so it breaks through. Start by going on the offensive with the leaners, because they’ll require the least amount of time, effort and money to tip into your “very favorable” category. The key is to build your strategy specifically to address these lower-rated items. By doing so, you are micro-targeting your efforts, and leveraging your existing assets to a group of folks that who are already purchasing from you.
  5. Reassess. As you proceed with your various marketing and sales efforts continue to gather information about the consumers in each subgroup. Once again ask the Essential Questions for each group, looking to see if their North Stars have moved. Decide whether the latest Squiggly Line is meaningful, or whether there are any new surprises, or whether there is any previously unseen Lighthouse data. (All of these terms and their usage are described and applied in Drinking from the Fire Hose.)

Making decisions with, and about, data

What would you say to an entrepreneur or businessperson who says, “My industry is evolving so fast, I have no idea what data is relevant anymore!”?

drinking-from-the-fire-hose-scissorsData is the supporting character, so dwelling on it is not an efficient use of precious time. If you are completely turned around, ask your customers or target prospects point blank: “What is the one thing I could have done differently to improve your experience or earn your business?” Start the dialogue. Think about your customer’s metrics and what fundamentals matter in their business. How can you help them achieve that?

Once you are reoriented, the most effective use of the available data is to be selective in what you show and leave the rest on the cutting-room floor.

No matter what data you have, and for what purpose, the numbers you worked so hard to get are just means to a wide variety of ends. They might help you focus on one Essential Question, but only so you can answer it. They might help you find your customer’s North Star, but only so you can follow it. They might warn you that you’re developing long-term strategies based on short-term results, alert you to a potentially game-changing surprise or to help you identify your swing voters. But once the numbers have warned you, or alerted you or picked your swing voters out of the crowd, you need to make some decisions based on what you are hearing in real time in a quickly evolving market.

What’s the one thing you want people to understand about how your seven Essential Questions relate to their decision-making?

Counting is easy. Evaluating is hard.

The smartest person in the room is not the one with the answer but the person who asks the most insightful question that sparks fresh thinking. Our goal was to put down on paper a set of deceptively simple, easily-to-apply questions to make sense of the data deluge. By posing the right questions, you can unlock radical new learning to make better decisions.

Remember, data is just a means to an end. In our data-driven world, almost all of us seem to have lost sight of that.

A final piece of advice

I particularly appreciated your practical advice about how to organize, invite people to and prepare for business meetings. It’s straightforward and simple. Can one person change the meeting habits of an entire corporate culture? If they try your method and it doesn’t work, can they still succeed? How?

Start small. What we put down on paper is the best of the best but don’t try it all at once.

For example, simply start with scheduling meetings in 30-minute blocks versus accepting the default one-hour meeting. Simple? Yes. Try it. See how easier it is to schedule meetings and how acceptances increased. Meeting madness has to stop. No one loves meetings since they have marginal value. They are rarely well organized, outcomes are not clear and the relevant people do not always participate. Set expectations—is the meeting intended to share information, brainstorm a solution or call the decision? Then manage it that way.

Over the years, we collected the best practices from small companies to Fortune 50 companies. No one does it perfectly. By developing a reputation for leading shorter but more useful meetings you will become the catalytic engine of change. If consistently practiced, it will spread. The smartest ideas always rise to the top.

The Raven Internet Marketing Tools Book Report is an occasional series featuring new marketing, communications and creativity books, including exclusive interviews with authors. To purchase your copy of Drinking From The Fire Hose: Making Smarter Decisions without Drowning in Information by Christopher J Frank and Paul Magnone, go to Amazon.com for Kindle and hardcover editions. Learn more about the book and the authors at www.firehosethebook.com.

Have you tried Raven Internet Marketing Tools to manage your SEO, social media or PPC campaigns? Our platform provides you with multiple, trusted data streams in one central location for the most insight and the best decisions. Sign up for a free 30-day trial today!

Arienne Holland is the Director of Marketing and Customer Experience at Raven. She divides her time between outreach, writing, teaching and understanding developers. Before Raven, Arienne spent more than a decade as an editor and graphic designer for Gannett. She was a 2010 Pulitzer Prize Finalist for team breaking news journalism. She likes bread, books and bourbon.

More about Arienne Holland | @RavenArienne

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